Facebook – The Emperor Apparently Has No Clothes – or not so many

I like it… but I don’t pay any attention to the ads...

The New York Times today reported that General Motors will stop running ads on Facebook.

While GM only spends $10 million a year on its Facebook ads, a tiny fraction of Facebook’s ad income (and GM’s ad budget), it may be the opening wedge in an ackowledgement that the emperor has no clothes.

“My colleagues and I have spoken with several other advertisers who were already thinking of putting their dollars elsewhere,” Ms. Parrish said. “Now that G.M. has done so in such a large and public way, many of the fence-sitters will know that they’re not alone in their disappointment about their results.” According to Forrester, Facebook made just under $4 in revenue per user in 2011.”

I don’t know about you, but I have not bought any GM cars, or any other cars for that matter, based on the ads I have seen on Facebook.

In fact, I make a point of ignoring the ads.

I find them both annoying and irritating.

And stupid.

The ads on my Facebook page at this moment are:

-An opportunity for me to get free laser cleaning of my teeth!

-A chance to change my ‘bad credit score’

-A chance to invest in the DWS suite of investments (did they look at the ad above about my bad credit rating?)

-A chance to get Invisiline for my bad teeth (which I just had lasered, and now I am going to put braces on them!)

As my friend Mark Bittman says, the ads on Facebook remind me of the kinds of ads that used to be on the back page of comic books when we were kids – X-Ray Specs! See through girl’s blouses!

Facebook may have 800 million users. Maybe more. It’s a really great free site – like Freecell  (Millions of Hours Wasted SInce 2005).

But does it generate revenue?

Is it a business?

At the moment, Facebook is able to extract (through advertising), about $5 per person per year, or just over 3¢ a day.

This is not exactly a real business.

Mark Zuckerberg’s genius was in creating a fantastic site, so long as he gave it away for free.

If Henry Ford had given his cars away for free, he probably could have given away 800 million cars.

But what is the point of a busines if it doesn’t make any money?

(A bit like buying credit swaps).

Surely, the crash is coming.

But probably not before Zuckerberg and Co. are able to cash out.

Well, they’re entitled.

They’ve done a great job of providing endless hours of free entertainment.

©2012 Michael Rosenblum

Michael Rosenblum

For more than 30 years, Michael Rosenblum has been on the cutting edge of the digital video journalism revolution. During this time, he has lead a drive for video literacy, and the complete rethinking of how television is made and controlled. His work has included: The complete transitioning of The BBC's national network (UK) to a VJ-driven model, starting in 2002. The complete conversion of The Voice of America, the United State's Government's broadcasting agency, (and the largest broadcaster in the world), from short wave radio to television broadcasting and webcasting using the VJ paradigm (1998-present). The construction of NYT Television, a New York Times Company, and the largest producer of non-fiction television in the US. Rosenblum was both the founder and President of NYT TV, (all based on this paradigm (1996-1998). The President and Founder of Video News International, a global VJ-driven newsgathering company, with more than 100 journalists around the world. (1993-1996). Other clients include Spectrum News, Verizon and CBS News.